FOREX ASSASSIN

OUTSIDE DAY

Introduction

This manual explains a very profitable and easy to spot

strategy that anyone can employ on nightly basis.

We have done some testing with this strategy and will be

including the results of those tests later on in the manual.

While this strategy doesn't produce a a tonne of trades the

ones that are triggered are great and you'll find this strategy

will be a great addition to the current strategy(s) you are

using.

In fact we expect that most successful traders will be using

multiple strategies to spread out their overall risk...much the

same way a mutual fund will invest in several stocks. This

way there eggs are not all in one basket.

Lets get started!

Strategy Background

The logic behind this strategy is to identify this chart pattern

then hop on board the breakout that we expect will occur.

The set-up doesn't happen very often, about once a month

or so per pair. But it is definitely worth watching for. It is a

pattern that identifies a strong turn in a short term trend.

Paper Trading: This is important for all strategies

We feel very strongly about using a demo account when

starting out, regardless of the strategy. We will continue to

allocate a section of every manual we produce for this topic,

thats how strongly we believe in it's usefulness to all traders.

Paper trading serves two functions that can't be overlooked.

1. Gain familiarity with the strategy.

2. Aid in developing your personal trading plan.

It only makes sense that there will be mistakes made when

implementing a new strategy, regardless of it's complications.

Trading real money as soon as you read through a manual once

is just pain foolish. “A fool and his money are easily parted”

comes to mind. Take the time to use the demo account for 3-4

weeks to get the strategy down pat...some will need a little

less, some will require a little more, depending on the

individual and the strategy involved. This will allow you to take

the time and ask questions if you have any, before applying

real money to the account.

The next key to using a demo account is to help develop your

own trading plan. Each trader has their own set of

circumstances that will often differ from everyone else including

the creators of the strategy you plan to trade. Often times the

creator of the strategy has designed it to suit his or her specific

needs, risk tolerance, account size etc. Your situation might not

always match. So take the time to paper trade and develop

your trading plan.

Demo Trading Accounts

There are many different brokers who offer demo accounts.

Several of them share the same trading platform, MT4. This is

a very popular and easy to use platform with many added

features for the advanced trader. Some brokers have

developed their own platforms, so try several and see which

one you prefer.

www.ibfx.com (MT4 platform)

www.forex.com (Have their own platform and have access to

MT4 as well through partnerships with other brokers)

www.fxcm.com (Have their own platform and MT4 as an

option)

www.gftforex.com (Have their own trading/charting platform)

There are dozens more places to get demo accounts but these

ones have been around for a while and can be considered

reputable by most standards.

Outside Day Set-up

We start by setting up and using a daily chart. This is where

we will look for the outside day pattern.

We'll define an outside day as;

The high, low range of the candle is outside the range of the

previous candle.

(It could have been a red candlestick with a larger rangethan a green candle.)

EntryOnce the set up has taken place we look to enter into a

trade in the direction of the close of the outside candle.

So if the outside candle is green or an up candle then we

look to go long.

If the outside candle is red or a down candle then we look to

go short.

The actual entry will be based on the outside days high or

low.

If we are looking to go long we will enter the next day when

the price breaks above the outside days high by “X” pips.

If we are looking to go short we will enter the next day

when the price breaks below the outside days low by “X”

pips.

We say “X” pips because in the tests that we did, the

amount of of pips above or below the outside days high/low

will change slightly depending on the pair being traded.

The pictures below show the long and short entries. The

black line represents the entry after the outside day has

completed.

Trade Station TestingWith all testing, past results are no guarantee of future

results. Some people don't believe in back testing, other

swear by it, which ever side of the fence you stand on is

fine, but we wanted to include the test results as we had

access to TS from one of our customers.

In our testing we found that of the 11 pairs we tested all

were profitable, but 5 in particular stood out.

They are;

USD/JPY

USD/CAD

USD/CHF

EUR/JPY

GBP/JPY

The results over the past two years of testing resulted in

only 83 trades, but they were winners over 60% of the time.

Entry

If the outside day candle is red then we look to go short the

next day. We look to enter below the outside days low by

“X” pips when going long.

If the outside day candle is green then we look to go long

the next day. We look to enter above the outside days high

by “X” pips.

We say “X” pips because each of the five pairs we are

looking to trade will have different values.

USD/JPY = 7 pips above outside day high or 7 pips below

outside day low.

USD/CHF = 9 pips above outside day high or 9 pips below

outside day low.

USD/CAD = 5 pips above outside day high or 5 pips below

outside day low.

EUR/JPY = 5 pips above outside day high or 5 pips below

outside day low.

GBP/JPY = 5 pips above outside day high or 5 pips below

outside day low.

Targets and Stops

Below are the targets for the 5 pairs we will look to trade.

USD/JPY = 105 pip profit target/40 pip stop loss

USD/CHF = 45 pip profit target/50 pip stop loss

USD/CAD = 95 pip profit target/60 pip stop loss

EUR/JPY = 25 pip profit target/60 pip stop loss

GBP/JPY = 55 pip profit target/60 pip stop loss

All open trades are closed on Friday, no trades are held over

the weekend.

Ignore Sunday when looking for the outside day set-up.

* NOTE: The above numbers can be changed/tweaked to suit your own risk tolerance and are included as a guide.

Example #1 & #2May 28/08, June 06/08

In this example we will show two trades that took place on

the USD/CHF. One was a long trade and the other was a

short.

We'll look at the long trade triggered on May 28/08 first.

We can see by the picture below labeled with the #1 shows

the outside day on May 27/08. The green outside day

candlestick means we will be looking to go long.

As mentioned above in the entry section, when trading the

USD/CHF we will get long the next day when the price

reaches 9 pips above the outside days high.

When trading the USD/CHF we look for a target of 45 pips

and risk 50 pips.

As we can see by the picture we reached our profit target

the same day as we entered.

The outside day is circled and we can see the next day the

trade was triggered and went in our favor.

Using the same chart screen shot we can see that a short

trade was triggered a few days later on June 06/08

The outside day is indicated by the #2 above the circled

candlestick. The outside day is a red candlestick which

means we will look to get short the next day once the price

trades below the outside days low by 9 pips.

Again we are looking for a target of 45 pips and are looking

to risk 50 pips.

Looking at the chart we can see the trade worked out in our

favor.

As most of you know we always preach that everyone needs

to create their own personal trading plan. We can see in

both of the trades above that there was more profit to be

had...perhaps some of you might have been trading multiple

lots and would hold on to a portion of your position for

larger gains...we want to make sure that everyone puts

some thought into their trading and their own

situation...how many lots to trade, profit targets etc.

OUTSIDE DAY SUMMARY

We hope you take the time to watch for this strategy. It

might not be the most active strategy meaning it won't

trigger a trade every day, but it's well worth watching for.

It will make a nice addition to your portfolio of strategies.

If you have any questions or have some ideas on how to

improve the strategy, you can always send us an email at.

help@forexassassin.com

Reference Guide

Demo Accounts – Be sure to visit the links above and use a

demo account. They are a good way to help you get used to

any new strategy as well as help develop your trading plan.

General Rules

– All trades must be closed before the weekend.

– Sunday's are ignored when looking for the Outside Day.

Targets and Stops

USD/JPY = 105 pip profit target/40 pip stop loss

USD/CHF = 45 pip profit target/50 pip stop loss

USD/CAD = 95 pip profit target/60 pip stop loss

EUR/JPY = 25 pip profit target/60 pip stop loss

GBP/JPY = 55 pip profit target/60 pip stop loss

Entry

USD/JPY = 7 pips above outside day high or 7 pips below

outside day low.

USD/CHF = 9 pips above outside day high or 9 pips below

outside day low.

USD/CAD = 5 pips above outside day high or 5 pips below

outside day low.

EUR/JPY = 5 pips above outside day high or 5 pips below

outside day low.

GBP/JPY = 5 pips above outside day high or 5 pips below

outside day low.

help@forexassassin.com

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